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Is revaluation and realisation a/c same??
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A revaluation account is prepared only when there is any change in the value of the assets and liabilities of the partnership firm, at the time of admission, retirement, or death of a partner. On the other hand, a realization account is opened when the firm goes into liquidation, so as to close the books of accounts and also to compute the net effect (profit or loss) arising due to the realization of assets and settlement of liabilities.
difference between revaluation and realisation account is concerned: An account opened by the firm to know whether there is any change in the value of assets and liabilities of the firm, during reconstitution, is Revaluation account. On the other hand, realisation account is an account prepared to ascertain the net profit or loss on the sale of assets or discharge of liabilities, during dissolution. Revaluation account comprises of only those assets and liabilities, whose values are revised. Conversely, realisation account contains all the assets and liabilities. These two accounts mainly differ in relation to the time of preparation of the two, i.e. revaluation account is prepared when the firm is reconstituted, whereas realisation account is prepared when the firm is dissolved. Revaluation account is prepared at various events like admission, retirement or death of partners. Unlike realisation account is prepared only once, and that is when the firm discontinues its operations. In the case of revaluation account, accounting entries are made on the basis of the difference in the book value and the revalued amount of assets and liabilities. As against this, accounting entries are made at the book value of the assets and liabilities.
Revaluation account is an account prepared to ascertain the variation in the values of the assets and liabilities of the firm. Realisation account is an account prepared to ascertain the net profit or loss on the sale of assets or discharge of liabilities. Only those assets and liabilities which are revalued.
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